Smaller firms join buyback spree in Q3

In total, 87 share buyback deals were done from January to October.

Aside from the large Strait Times Index (STI) firms, smaller-cap companies are also purchasing back their stocks. In total, 87 share buyback deals were done from January to October which is higher compared to the 28 transactions for the whole of 2017 and the 40 recorded back in 2016, OCBC Investment Research (OIR) noted from a Bloomberg data.

Amongst the smaller firms with significant buyback activities are medical firm HC Surgical Specialists which bought back 201,000 shares, IT firm Sevak which bought back 105,000 shares, and manufacturing firm Broadway Industrial Group with 51,000 shares repurchased.

The firm noted that 51 or 59% of the total transactions were made in Q2 whilst the market was at its lowest.

Also read: Singapore's big banks are on a buying spree as share buybacks hit $116.5m

“Whilst there could be many reasons for share buyback, the pick-up in share buyback transactions is a key signal that the insiders are seeing value in their stocks at current price levels, largely due to the rapid decline in the STI,” OIR explained.

STI companies such as Sembcorp Industries (616,000 shares), Silverlake Axis (326,000) OCBC (1.15 million shares), and City Developments (890,000 shares) were amongst the most active in the buyback spree from September to early October.

In August, share buybacks surged 308% to $245m.